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Potential shutdown forces triage planning in cities, counties

City and county officials in Minnesota say the pending state government shutdown could cause serious cash problems for them and already is making it hard to plan their budgets for the coming year.

As state government prepares for a potential shutdown July 1, it has triggered a cascade of planning in cities and counties. There's uncertainty over whether money will arrive for county services and city budgets, and what parts of state government will remain operational for local units of government that rely on its databases, money and personnel.

"Not only is St. Paul faced with this uncertainty with the government shutdown, but we're faced with this uncertainty at a time when we need to start having conversations about our 2012 budget, which needs to be prepared and then presented by August 15," said Richard Carlbom, St. Paul's communication director.

The state delivers money to most cities and counties twice a year, and the first of those payments are supposed to go out July 20.

“Not only is St. Paul faced with this uncertainty with the government shutdown, but we're faced with this uncertainty at a time when we need to start having conversations about our 2012 budget.”

Richard Carlbom, St. Paul communication director

Cities are anticipating $260 million in Local Government Aid (LGA), and counties are expecting about $100 million in county program aid.

They're worried that state employees won't be on the job to send the money.

The League of Minnesota Cities will make the case that LGA is an essential government service because it pays for public safety.

The League's Gary Carlson says it plans to join a state attorney general's petition in Ramsey County District Court. Failing that, Carlson says, the League will file its own suit to compel payment of LGA.

"We think state law is fairly clear," said Carlson. "It does say an amount necessary to administer the program is appropriated and funds are appropriated, and we think that that is an indication of the Legislature's intent that those are pretty important funds that go to cities."
The city of St. Paul receives about a fourth of its budget from LGA. That pays for police, firefighters, city prosecutors and emergency medical services, Carlbom said.

"It's pretty tough not to impact public safety when you lose all of that."

Minneapolis is waiting on $44 million in July. While the state's two largest cities get the biggest LGA checks, many smaller communities count on state funds for a much larger share of their budgets.

Sandstone city administrator Sam Griffith says his city, which has 2,800 people and lies 90 miles north of the Twin Cities, has a low property and commercial tax base, so LGA makes up three-fourths of his city's budget. He says Sandstone has been cautious and frugal, setting aside some reserves in case this day should come.

"Basically, we don't trust the Legislature. Them that giveth, taketh away," Griffith said. "And so what we said is, 'Ok, Let's not assume we're always going to have this money."

But Griffith says the uncertainty over the shutdown, or the cuts that could come in a final budget deal, is the toughest part. And the impasse in St. Paul has residents coming to him for answers.

"Citizens get frustrated and they come in, they talk to us because we're accessible," said Griffith. "You can't walk into your legislator's office, you can't walk into the governor's office and vent, but you can my office. So all these things come down to, 'You're the accessible government. Why aren't they doing something about this? Why are they arguing?"

Griffith says when people complain about their taxes he can show them how much it costs to pump sewage, pipe drinking water, plow the roads or patrol the streets. LGA money supports all those services in Sandstone.

Minnesota's counties are also closely tied to state operations. Counties have to deliver services that are mandated by the state, from child protection to corrections.

The possibility of a state government shutdown has launched counties on their own triage plans, asking what their essential services are that must continue.

Roughly a fifth of Hennepin County's budget comes from the state, said Richard Johnson, county administrator. The Hennepin County Medical Center receives state funding. State dollars pay for parole officers for sex offenders. Johnson says there's a risk to the county if it pays these expenses during a shutdown.

"One of our concerns is there's no guarantee here of reimbursement," said Johnson.

Johnson says the county is putting in significant hours to prepare for the potential budget shutdown.